Driven by strong incremental sales of urea and low-density polyethylene, Industries Qatar posted a net profit of QR6.3 billion ($1.72 billion) in nine months up to September this year.
Announcing IQ’s nine-month results here yesterday, chairman and managing director HE Dr Mohamed bin Saleh al-Sada, also Minister of Energy and Industry said the nine-month performance, one of IQ’s best, was supported by “strong incremental sales volumes” following the launch of QR12.8bn of facilities that added 2mn tons of urea and 240,000 tons of low-density polyethylene (LDPE) capacity during 2012.
Furthermore, total cash and short-term deposits across all of the group’s companies have grown by QR2bn over the same period last year to reach QR10.3bn in September 2013, indicating IQ’s enhanced cash position.
Al-Sada also said IQ looked forward to the rest of the year with confidence.
An Industries Qatar statement showed the nine-month net profit declining by 4.8% (QR0.3bn) compared with the same period in 2012.
Significant incremental depreciation and finance charges following the capitalization of the new fertilizer and petrochemical assets in 2012 accounted for the additional movement in net profit vis-à-vis earnings before interest, tax, depreciation and amortization (Ebitda).
Ebitda for the nine months that ended on September 30 was QR6.5bn, a decrease of QR0.3bn, or 4.9%, on the same period last year.
“Benefits gained from higher sales volumes following the commercial launches of Qafco 5, 6 and LDPE-3, weak prior year comparatives due to extended fuel additives shut-downs in 2012 and improved operating results at several of the group’s local and regional investments, were off-set by general price weakness and increased fertilizer and petrochemical operating costs,” said Abdulrahman Ahmad al-Shaibi, IQ chief co-coordinator.
Quarter-on-quarter consolidated Ebitda deteriorated by QR0.3bn, or 12.8%, largely due to unfavorable price movements of the group’s fertilizer products, and higher petrochemical operating costs/reduced other operating income.
Al-Shaibi said, “The group recorded strong year-on-year volume growth following the launch last year of new petrochemical and fertilizer facilities, while also maintaining exceptional petrochemical and steel Ebitda margins.
“The results, however, were adversely impacted by continued significant fertilizer price deflation, in line with international trends, and heightened fertilizer operating costs following increases in natural gas rates under the supply and purchase agreement with Qatar Petroleum.”
Qatar Exchange-listed IQ is one of the region’s largest conglomerates dealing with petrochemical, fertilizer and steel products.
Revenue earned by IQ from the petrochemical sector totaled QR3.8bn in nine months up to September, up 11.5% (QR0.4bn) compared with the same period in 2012.
The fertilizer segment closed the period with revenue of QR4.8bn, while steel sector earned revenue of QR4.4bn in the first nine months of 2013.